December 04, 2006

Road Pricing or Road Privatisation?

...no where does it highlight the benefits of private road ownership. No where does it recommend a supply side liberalisation on road building and the abandomement of various planning laws – including compulsory purchase orders. No where does it talk about allowing private law enforcement in public space or the need for complete privacy when in the future people pay their tolls and charges. Commissioned by the Chancellor, Gordon Brown, Sir Rod’s report instead talks in the usual bland and deeply corporatist language of politicised business-speak. Road pricing is purely couched in terms of cutting traffic, encouraging trains and buses and being generally good for the government.

This may well be correct - this government's penchant for corporatism is well documented. My problem with the main criticism however is that I have yet to see a realistic proposal for privatisation of roads. Everything I have read is either full of gee-whizzery about how wonderful it will all be or as bland as Eddington is being criticised for.

The problem is that ownership of UK streets is much more complex than the libertarian mythology would have it. Many are not strictly speaking owned by the state. Except for motorways and other modern roads, where the land has been acquired outright for the road, usually it must be admitted by Compulsory Purchase Orders, it is apparently only the surface that is owned by the state, while various privately owned utilities have rights to dig it up for their own purposes. The sub-surface however appears to be owned by frontagers.

Privatisation would therefore be much more complex than simply selling the roads to the highest bidder, since millions of people will have a direct interest. They could be expropriated of course - as happened not too long ago when the TSB was stolen from its depositors by the Tories and as happened with the development of the railways and canals. The alternative of simply handing roads back to the frontagers would produce incredible confusion and complexity and take years to unravel.

An example of what this might be like is given in Simon Jenkins' book, Landlords to London. Describing the slow progress in improvement of the streets of 19th century London to meet the load placed on them he says (pp 113-114):

While all efforts were being poured into driving through the new railways, the continued domination of the horse-drawn vehicle coupled with the complexity of ownership of the street frontages, staved of any action to provide newer or wider roads. Beside, the responsibility for the condition of the streets lay with a multitude of individual parish vestries who were not finally wound up until the end of the century.

From Jenkins' book it is clear that even at the height of the most rampant capitalist expansion this country has seen, improvements in infrastructure only took place with the state as a major enabler. The introduction of the railway to London involved numerous Private Acts, each one giving the new railway company sweeping powers of compulsory acquisition. In total the railways ended up appropriating 5.5% of London's built up area and displacing some 100,000 of the poorest people (p107).

Usually the railway companies communicate with the landlords, and tell them " We are going to take your property"; the landlord gives the ordinary weekly or monthly notice to the tenants, and long before the railway comes, the tenants have been got rid of, so that the landlord pockets the compensation....This is before the Act is obtained. The companies, therefore, can go before Parliament and say, "We do not displace people; there is nobody there".

[Octavia Hill, quoted by Jenkins p108]

The development of the railways and the growth of London are often cited as demonstrations of the power of private enterprise and the market. They were no such thing. The railways depended almost entirely on state intervention to support their land acquisition while London was left in a state of chaos by the activities of the major estates. Within the estate developments no doubt life was good, but movement around the capital was chaotic and the streets were in appalling condition.

It was only with the advent of the Metropolitan Board of Works in 1855 that things began to change. London's appalling sewer system began to be improved and London saw its first new thoroughfares since Nash. (Jenkins p114) The Board of Works had similar, if less sweeping powers of acquisition to the railway companies.

I'm presenting this very brief history, not to make the case for large scale state intervention, but to demonstrate how even at the height of the Victorian era the state played a substantial role in creating modern London. It is romantic nonsense to think that handing over our streets to private ownership would automatically lead to massive benefits for the average town dweller (setting aside for the moment whether that is legally possible).

I'm not sure what the answer might be. Congestion and pollution will continue to rise without some fairly drastic action. Road pricing will almost certainly be needed but treating it as simply another pocket to pick will however almost certainly lead to opposition.

Comments

...no where does it highlight the benefits of private road ownership. No where does it recommend a supply side liberalisation on road building and the abandomement of various planning laws – including compulsory purchase orders. No where does it talk about allowing private law enforcement in public space or the need for complete privacy when in the future people pay their tolls and charges. Commissioned by the Chancellor, Gordon Brown, Sir Rod’s report instead talks in the usual bland and deeply corporatist language of politicised business-speak. Road pricing is purely couched in terms of cutting traffic, encouraging trains and buses and being generally good for the government.

This may well be correct - this government's penchant for corporatism is well documented. My problem with the main criticism however is that I have yet to see a realistic proposal for privatisation of roads. Everything I have read is either full of gee-whizzery about how wonderful it will all be or as bland as Eddington is being criticised for.

The problem is that ownership of UK streets is much more complex than the libertarian mythology would have it. Many are not strictly speaking owned by the state. Except for motorways and other modern roads, where the land has been acquired outright for the road, usually it must be admitted by Compulsory Purchase Orders, it is apparently only the surface that is owned by the state, while various privately owned utilities have rights to dig it up for their own purposes. The sub-surface however appears to be owned by frontagers.

Privatisation would therefore be much more complex than simply selling the roads to the highest bidder, since millions of people will have a direct interest. They could be expropriated of course - as happened not too long ago when the TSB was stolen from its depositors by the Tories and as happened with the development of the railways and canals. The alternative of simply handing roads back to the frontagers would produce incredible confusion and complexity and take years to unravel.

An example of what this might be like is given in Simon Jenkins' book, Landlords to London. Describing the slow progress in improvement of the streets of 19th century London to meet the load placed on them he says (pp 113-114):

While all efforts were being poured into driving through the new railways, the continued domination of the horse-drawn vehicle coupled with the complexity of ownership of the street frontages, staved of any action to provide newer or wider roads. Beside, the responsibility for the condition of the streets lay with a multitude of individual parish vestries who were not finally wound up until the end of the century.

From Jenkins' book it is clear that even at the height of the most rampant capitalist expansion this country has seen, improvements in infrastructure only took place with the state as a major enabler. The introduction of the railway to London involved numerous Private Acts, each one giving the new railway company sweeping powers of compulsory acquisition. In total the railways ended up appropriating 5.5% of London's built up area and displacing some 100,000 of the poorest people (p107).

Usually the railway companies communicate with the landlords, and tell them " We are going to take your property"; the landlord gives the ordinary weekly or monthly notice to the tenants, and long before the railway comes, the tenants have been got rid of, so that the landlord pockets the compensation....This is before the Act is obtained. The companies, therefore, can go before Parliament and say, "We do not displace people; there is nobody there".

[Octavia Hill, quoted by Jenkins p108]

The development of the railways and the growth of London are often cited as demonstrations of the power of private enterprise and the market. They were no such thing. The railways depended almost entirely on state intervention to support their land acquisition while London was left in a state of chaos by the activities of the major estates. Within the estate developments no doubt life was good, but movement around the capital was chaotic and the streets were in appalling condition.

It was only with the advent of the Metropolitan Board of Works in 1855 that things began to change. London's appalling sewer system began to be improved and London saw its first new thoroughfares since Nash. (Jenkins p114) The Board of Works had similar, if less sweeping powers of acquisition to the railway companies.

I'm presenting this very brief history, not to make the case for large scale state intervention, but to demonstrate how even at the height of the Victorian era the state played a substantial role in creating modern London. It is romantic nonsense to think that handing over our streets to private ownership would automatically lead to massive benefits for the average town dweller (setting aside for the moment whether that is legally possible).

I'm not sure what the answer might be. Congestion and pollution will continue to rise without some fairly drastic action. Road pricing will almost certainly be needed but treating it as simply another pocket to pick will however almost certainly lead to opposition.